Financial Pressure, Energy Consumption and Carbon Emissions: A Quasi-Natural Experiment Based on the Educational Authority Reform

Ma Entao () and Yang Xuan
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Ma Entao: Professor and Director of the Research Division of Shandong University of Finance and Economics Jinan, China
Yang Xuan: PhD Candidate at the School of Finance and Taxation, Shandong University of Finance and Economics. Jinan, China

China Finance and Economic Review, 2022, vol. 11, issue 4, 44-65

Abstract: At present, China is in the period of large-scale tax and fee cuts and external pandemic shocks. Local governments’ financial pressure has intensified. There is a lack of existing studies on how it will affect local carbon emissions. This paper uses the quasi-natural experiment of the 2010 educational authority reform to measure exogenous changes in financial pressure. It adopts the continuous double differential method to empirically investigate the impact of local financial pressure on carbon emissions. The results of the paper are as follows. First, the financial pressure generated by the educational authority reform has significantly increased local carbon emission intensity. This indicates that local governments will address carbon emissions in other ways when they feel financial pressure. Second, to ease financial pressure, local governments will regulate high energy-consuming enterprises and utilize their high production value and strong tax-generating ability to scale up their production capacity and obtain more tax revenues, which will lead to a large amount of carbon emissions. This study is of important reference significance for how to deal with financial pressure from now on and how to well handle the relationship between local finance and carbon emissions.

Keywords: financial pressure; educational authority reform; high energy consuming enterprise; carbon emissions (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:cferev:v:11:y:2022:i:4:p:44-65:n:6

DOI: 10.1515/cfer-2022-0022

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